The nature of gasoline pricing can be a painful obsession; not to mention a hands-on experience of the rockets-and-feathers phenomenon: stations manage to coordinate increases instantaneously, rejoicing in a chorus of margin explosion. Yet let OPEC jack up production and decreases float down very gently.

Yet more infuriating is the oligopolistic nature of pricing. Competitive pricing is rarer than genuine application of the Volker Rule; and the words "price war" simply do not apply.

So it was pleasant to see the German Cartel Office earlier today announce that they had had enough (despite their original OMV / Total ruling being overturned). Strike a blow for consumer motorists!

It is, it appears, a theme - though how strong a theme remains to be seen. For example, the Cartel Office stopped Shell buying as many stations from retailer Edeka as they wanted earlier this month. That is, Shell got 41 instead of 44 stations.

Looks symbolic but the regulators are also set to finish a two year "probe" into the gasoline market. Perhaps this may end up taking heart from research in the Dutch market (where regulators appear more aggressive). A paper from summer 2009 by Lach and Moraga-González, said:

"We found that as competition the number of gas stations increases the distribution of prices spreads out, with the low prices going down and the high prices going up. Consequently, competition has an asymmetric effect on prices.

This result has important welfare implications because when some prices increase and others decline, the price actually paid by consumers will depend on their shopping behaviour. All (hypothetical) consumers in our data, irrespective of whether they are informed about one or more prices, benefit from an increase in the number of stations.

The magnitude of the welfare gain, however, is greater for those consumers that observe more prices. As a result, an increase in competition has a positive but unequal effect on the welfare of consumers."

If the researchers ever turn their sights on other oligolpolies - the cosy division of the French mobile telecoms market into three very unequal shares comes to mind - odds are they would find exactly the same traits (and much the same solutions).

There is useful competition-creating regulation to be enacted on consumers' behalf in the European Union. And has been for some time.

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